In October of 2008 Groupon launched it’s group buying platform in Chicago and was met with wild success. In just under 3 years they have grown to an email list of upwards of 30 million subscribers across North America with a company valuation estimated around $25 Billion.

Their early success was copied by other group buying sites like Living Social which is now owned by Amazon, and Wag Jag which was bought out by the Toronto Star and is now the largest group buying site in Canada with over 750,000 subscribers.

The sites have no inventory to worry about, their products/services are supplied by third party companies and they take 50% of the total sale. All three of these sites have had single day sales that have brought in millions of dollars. With deals running daily across all major cities there is a lot of money to be made. The value that they add to their customers are instant access to thousands of potential new customers. They control the customer lists and that is where they maintain their worth.

Like all companies that are blessed with rapid growth and success, they have attracted many get rich quick opportunists. With a very low barrier to entry these dogs are salivating at the potential profits they can earn. There is very little risk, and as long as you copy the success of those before you, what could possibly go wrong.

I personally know of several people that had this very same thought. They launched their business and started to market only to find that things were not as easy as they seemed. “We can’t build a user base, but we are offering an amazing free opportunity. Why won’t people sign up,” they sadly ask.

Before they got into the business, they were so busy thinking of the profits they forgot to answer one of the most critical questions of all.

What makes our business unique? How can we differentiate ourselves from the competition and add value to our customers?

When you’re business strategy is to copy a company that has first mover advantage, a large customer base, an even larger marketing budget, and has already established themselves you are doomed for failure without differentiation.

Many of these group buying sites are starting to fold when they realize that they can’t compete with the big guys. Customers have already signed up for multiple email lists with coupons and don’t want to get another daily email. Does this mean that there is no more room in the marketplace for a company to succeed in group buying? Absolutely not, but the only companies that will succeed are the ones that can answer the question how are we different, and why does that matter to our customers.

Don’t just copy, take a good idea and improve it to add your own uniqueness to it. That is the true path to success.